May 07, 2015 Interim Report 3m 2015 Investors and Analysts Conference Call on May 07, 2015 Andreas Müller, Head of Corporate Accounting & Tax / IR Bettina Schneider, Deputy Head IR
3m 2015: Highlights Negative earnings in first quarter 2015 Positive orders received development Improvement in operating cash flow due to lower working capital increase Earnings expectations for FY 2015 reduced Comprehensive measures for efficiency enhancement and capacity adjustments planned Bilfinger SE Company Presentation May 07, 2015 page 2
Sale of Construction division completed Sale of Construction division to Implenia was closed on March 2, 2015 Employees: nearly 1,900 Output volume: approx. 600 million Net proceeds: approx. 220 million Enterprise value: a good 100 million, EV/EBIT of approx. 6 Cash inflow: 75 million after transaction expenses Capital gain after risk provisioning: 12 million Bilfinger SE Company Presentation May 07, 2015 page 3
Output volume and orders positively influenced by first-time consolidation and F/X effects Output volume +3% Organically: -4% 1,715 1,763 Orders received +9% Organically: +4% 2,046 1,870 Order backlog -11% Organically: -15% 6,638 5,913 3m 2014 3m 2015 3m 2014 3m 2015 March 2014 March 2015 Bilfinger SE Company Presentation May 07, 2015 page 4
Disappointing earnings development Improvement in operating cash flow due to lower working capital increase Adjusted EBITA Adjusted net profit Operating Cashflow 47 26-94 -8 3m 2014 3m 2015-15 3m 2014 3m 2015-196 3m 2014 3m 2015 EBITA: adjusted for one-time expenses in connection with Bilfinger Excellence Adjusted net profit: also adjusted for the amortization of intangible assets from acquisitions Bilfinger SE Company Presentation May 07, 2015 page 5
Industrial Increasingly difficult situation in oil and gas markets Markets and highlights Stable output volume and orders received development due to f/x effects, order backlog significantly lower than in previous year EBITA declined to 9 million, EBITA margin 1.1% Organic development Q1 FY 2015: -4% in output volume, -76% in EBITA Negative development due in particular to the situation in the European and US oil and gas sectors underutilization of capacities in a number of areas as well as worsened earnings in individual projects Outlook 2015 Significant decrease in output volume Output volume by region 17% America 62% Rest of Europe 3% Asia 2015e 18% Germany 3m 2014 3m 2015 Change FY2014 Output volume 833 835 0% 3,705 Orders received 834 840 1% 3,276 Order backlog 2,816 2,500-11% 2,404 Capital expenditure 17 16-6% 67 Depreciation of P, P & E 15 16 7% 64 EBITA adjusted 31 9-71% 190 EBITA margin adjusted 3.7% 1.1% 5.1% Bilfinger SE Company Presentation May 07, 2015 page 6
Power Fundamental reorganization required Markets and highlights Output volume, orders received as well as order backlog significantly below the prior-year figures Organic development Q1 FY 2015: -13% in output volume Lack of demand in the power plant business in Germany and in other European countries Underutilization of capacities in a number of areas as well as worsened earnings in individual projects led to negative earnings Outlook 2015 Significant decrease in output volume Output volume by region 14% Africa 14% Asia 4% America 2015e 25% Germany 43% Rest of Europe 3m 2014 3m 2015 Change FY2014 Output volume 320 287-10% 1,445 Orders received 422 325-23% 1,090 Order backlog 1,505 1,116-26% 1,060 Capital expenditure 7 2-71% 22 Depreciation of P, P & E 6 7 17% 27 EBITA adjusted 16-18 8 EBITA margin adjusted 5.0% -6.3% 0.6% Bilfinger SE Company Presentation May 07, 2015 page 7
Building and Facility Continuation of positive business development Markets and highlights Increase in output volume, orders received and EBITA EBITA margin increased to 2.7% (Q1 2014: 2.1%) Organic development Q1 FY 2015: 0% in output volume, -8% in EBITA Development of orders received in Facility Services positively influenced by extension of a significant service contract Outlook 2015 Output volume will grow organically and will increase significantly as a result of the acquisition of British real-estate services provider GVA Output volume by region 2% Australia Asia 9% America 31% Rest of Europe 1% 2015e 57% Germany 3m 2014 3m 2015 Change FY2014 Output volume 584 658 13% 2,659 Orders received 636 917 44% 2,298 Order backlog 2,348 2,317-1% 2,004 Capital expenditure 8 8 0% 32 Depreciation of P, P & E 5 6 20% 20 EBITA adjusted 12 18 50% 136 EBITA margin adjusted 2.1% 2.7% 5.1% Bilfinger SE Company Presentation May 07, 2015 page 8
Comprehensive measures to improve efficiency and to adjust capacities are planned Further efficiency improvements in administrative functions Comprehensive restructuring and a fundamental reorganization in Power in addition to the measures already in place Capacity adjustments in selected areas of Industrial Objectives include achievement of savings, reduction of overcapacities, a greater level of cost flexibility and a lowering of project risks Further focusing of business portfolio Details will be elaborated on in the coming weeks and months Bilfinger SE Company Presentation May 07, 2015 page 9
Outlook for FY 2015 With lower output volume, the company now expects a considerable decrease in adjusted EBITA against the previous year figure of 270 million Primary reasons include the negative development of the oil and gas business which was more pronounced than expected, especially in the USA, as well as ongoing weakness in demand in Power. Building and Facility is developing in line with the forecast For the same reasons, adjusted net profit from continuing operations will be significantly below the prior-year figure of 175 million. Furthermore, a range of special items will have an impact on net profit, especially restructuring expenses In the case of further upheaval in the power plant sector and depending on the future strategic direction of Power, a goodwill impairment in this segment cannot be ruled out Bilfinger intends to issue a quantitative forecast for financial year 2015 as soon as the change in the Executive Board Chairmanship has been completed and the new committee has had an opportunity to carefully analyze and evaluate the prospects for the current fiscal year Bilfinger SE Company Presentation May 07, 2015 page 10
May 07, 2015 Interim Report 3m 2015 Financials Investors and Analysts Conference on May 07, 2015 Andreas Müller, Head of Corporate Accounting & Tax / IR Bettina Schneider, Deputy Head IR
Negative earnings in first quarter 2015 3m 2014 3m 2015 FY 2014 Comments 3m 2015 Output volume 1,715 1,763 7,690 EBITA 18-9 198 Depreciation of 30m (3m 2014: 27m) EBITA adjusted 47-8 270 EBITA margin adjusted 2.7% -0.5% 3.5% Amortization -11-9 -191 In FY 2014: Amortization on intangible assets from acquisitions of 43m and goodwill impairment Power of 148m EBIT 7-18 7 Net interest result -10-9 -36 In FY 2014: Including 6m capital gain from the sale of shares in BBGI EBT -3-27 -29 Income taxes 1 5-46 Earnings after taxes from continuing operations -2-22 -75 Earnings after taxes from discontinued operations 10 5-27 Minority interest 0 0 31 Single losses of certain entities are not capitalized as tax-loss carryforwards, therefore lower tax income In 2014: Reduction by 13 million of deferred tax assets on tax-loss carryforwards in accordance with Section 8c of the German Corporate Income Tax Act (KStG) Capital gain on sale of Construction division after risk provision: 12m, remaining Construction activities including Offshore Systems: - 6m, Concessions: - 1m in FY 2014 after write-down in Offshore Systems of - 47m In FY 2014: Thereof minority share of write-down on investments in a Polish production site 19m Net profit 8-17 -71 Net profit adjusted (continuing operations) 26-15 175 Bilfinger SE Company Presentation May 07, 2015 page 12
Organic development Group Organic development of output volume Organic development of adjusted EBITA +4% -4% +3% +60 +61-73 +3% +13% +4% 1,715 1,763 +47 +6 +2-63 3m 2014 Net acqusitions F/X Organic 3m 2015 3m 2014 Net acqusitions -8 F/X Organic 3m 2015 Bilfinger SE Company Presentation May 07, 2015 page 13
Overview of earnings adjustments 3m 2014 3m 2015 FY 2014 Comments 3m 2015 EBITA 18-9 198 Adjustments special items (pre-tax) 29 1 72 Excellence: - 1m (3m 2014: - 29m, FY 2014: - 43m) In FY 2014: in addition restructuring expenses, mainly in Industrial and Power of - 38m as well as a capital gain Julius Berger Nigeria of 9m EBITA adjusted 47-8 270 Earnings after taxes from continuing operations -2-22 -75 Minority interest 0 0 12 Adjustments special items (post-tax) 20 1 61 In FY 2014: Adjusted by 37.5% minority share of write-down on investments in a Polish production site ( 19m) Excellence: - 1m (3m 2014: - 20m, FY 2014: -30m EUR) In FY 2014: in addition restructuring expenses, mainly in Industrial and Power of - 27m, Capital gain Julius Berger Nigeria of 9m as well as reduction of deferred tax assets on tax-loss carryforwards of - 13 m Amortization (post-tax) 8 6 177 In FY 2014: Goodwill impairment Power of 148m Net Profit adjusted continuing operations 26-15 175 EPS adjusted continuing operations 0.59-0.34 3.96 Bilfinger SE Company Presentation May 07, 2015 page 14
Valuation net debt Dec. 31, 2014 Mar. 31, 2015 Comments March 31, 2015 Cash and cash equivalents 403 308 See cash flow statement for details of change Financial debt (excluding non-recourse) -544-542 Including 500 million corporate bond (due Dec. 2019) Net cash/ net debt -141-234 Pension provisions -524-580 Increase due to lower discount rate of (from 2.0% to 1.5% in Euro) Expected cash-in sale of Construction activities to Implenia 60 0 Future cash-out restructuring provisions and risk provisions ~150 ~150 Excluding new restructuring programs recently announced Intra-year working capital need (seasonal shift) -200 to -250-100 to -150 Valuation net debt Approx. -1,000 Approx. -1,100 Bilfinger SE Company Presentation May 07, 2015 page 15
Intra-year working capital swing improved against previous year 3m 2014 3m 2015 FY 2014 Comments 3m 2015 Cash earnings from continuing operations 17-5 163 Decrease due to lower net profit from continuing operations Change in working capital -212-86 -78 Typical intra-year swing significantly lower than in prior-year period Gains on disposals of non-current assets -1-3 -20 In FY 2014: 6m from sale of shares in BBGI fund and 9m from JBN Cash flow from operating activities of continuing operations Net capital expenditure on property, plant and equipment / intangibles -196-94 65-26 -20-122 Proceeds from the disposal of financial assets 64 76 172 Free cash flow (continuing operations) -158-38 115 Investments in financial assets of continuing operations -3-1 -140 In FY 2014: Acquisition of GVA Cash flow from financing activities of continuing operations -6-6 -165 Change in cash and cash equivalents of continuing operations -167-45 -190 Change in cash and cash equivalents of discontinued operations -53-54 -61 F/X effects 1 7 8 Cash and cash equivalents at Jan. 1 669 403 669 Change in cash and cash equivalents classified as assets held for sale (Concessions, Construction, Offshore Systems) 1-3 -23 Cash and cash equivalents at March 31 / Dec. 31 451 308 403 Gross Capex of 28m (3m 2014: 35m) Gross Capex FY 2015e: approx. 1.5% of output volume Cash inflow from sale of Construction: 75m In FY 2014: Cash inflows from sale of Concessions projects ( 103m), BBGI shares ( 50m) as well as JBN shares ( 13m) Bilfinger SE Company Presentation May 07, 2015 page 16
May 07, 2015 Interim Report 3m 2015 Backup Investors and Analysts Conference on May 07, 2015
Q1 2015 Volume and contract overview Backup Output volume Orders received Order backlog 3m 2014 3m 2015 Change 3m 2014 3m 2015 Change 3m 2014 3m 2015 Change Industrial 833 835 0% 834 840 1% 2,816 2,500-11% Power 320 287-10% 422 325-23% 1,505 1,116-26% Building and Facility 584 658 13% 636 917 44% 2,348 2,317-1% Consolidation/ Other -22-17 -22-36 -31-20 Continuing Operations 1,715 1,763 3% 1,870 2,046 9% 6,638 5,913-11% Bilfinger SE Company Presentation May 07, 2015 page 18
Balance sheet Backup Assets held for sale Cash and cash equivalents Assets Equity and liabilities 5,795-167 -167 5,795 111-205 -243 129 308-95 Liabilities held for sale -18 2,139 Other current liabilities Receivables and other current assets 2,265 +49 Other non-current assets 384 +22 +26-28 +56 266 140 580 Prepayments received Other non-current liabilities Pension provisions Property, plant and equipment 657 +7-2 -1 542 39 Recourse debt Non-recourse debt Intangible assets 1) 2,070 +55 +43 1,960 Shareholders equity March. 31, 2015 Compared to balance sheet as of Dec. 31, 2014 1) Thereof goodwill 2,032 million (including intangibles from acquisitions) March 31, 2015 Bilfinger SE Company Presentation May 07, 2015 page 19
3m 2015: Organic development Industrial Backup Organic development of Output Volume Organic development of adjusted EBITA 0% +4% -4% 0% 0 +35-33 0% +5% -76% 0 +2-24 833 835 31-71% 9 3m 2014 Net acqusitions F/X Organic 3m 2015 3m 2014 Net acqusitions F/X Organic 3m 2015 Bilfinger SE Company Presentation May 07, 2015 page 20
3m 2015: Organic development Power Backup Organic development of Output Volume Organic development of adjusted EBITA 0% +3% -13% 0 +10-43 -10% 0% 0 0% 0 320 287 16-34 -18 3m 2014 Net acqusitions F/X Organic 3m 2015 3m 2014 Net acqusitions F/X Organic 3m 2015 Bilfinger SE Company Presentation May 07, 2015 page 21
3m 2015: Organic development Building and Facility Backup Organic development of Output Volume Organic development of adjusted EBITA +10% +60 +3% +16 0% -2 +13% 584 658 +51% +8% -8% +6 +1-1 +51% 12 18 3m 2014 Net acqusitions F/X Organic 3m 2015 3m 2014 Net acqusitions F/X Organic 3m 2015 Bilfinger SE Company Presentation May 07, 2015 page 22
Disclaimer This presentation has been produced for support of oral information purposes only and contains forwardlooking statements which involve risks and uncertainties. Forward-looking statements are statements that are not historical facts, including statements about our beliefs and expectations. Such statements made within this document are based on plans, estimates and projections as they are currently available to Bilfinger SE. Forward-looking statements are therefore valid only as of the date they are made, and we undertake no obligation to update publicly any of them in light of new information or future events. Apart from this, a number of important factors could therefore cause actual results to differ materially from those contained in any forwardlooking statement. Such factors include the conditions in worldwide financial markets as well as the factors that derive from any change in worldwide economic development. This document does not constitute any form of offer or invitation to subscribe for or purchase any securities. In addition, the shares of Bilfinger SE have not been registered under United States Securities Law and may not be offered, sold or delivered within the United States or to U.S. persons absent registration under or an applicable exemption from the registration requirements of the United States Securities Law. Bilfinger SE Company Presentation May 07, 2015 page 23